With Groupon 's founder Andrew Masongetting booted from the CEO spot, the company now has two new co-CEOs, at least on an interim basis during the search for a replacement. And one of them has a notable history in dealing with the challenges of a tech company that flew too close to the sun.

Groupon’s Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis will share the CEO duties. That means Mr Leonsis, a veteran of the first dotcom bubble, finds himself running a company suffering in the wake of the latest wave of inflated digital expectations.

Mr Leonsis joined AOL back in 1993, when what was then a fledgling internet service provider acquired the online marketing firm he founded. He quickly become a central figure during AOL’s explosive growth phase, helping fight off hardball competition from a Microsoft at the peak of its powers. He become a very wealthy man when AOL merged with Time Warner in a $112 billion deal 2001, in what is now seen as the peak of the doctom bubble.

We all know what happened next, and the fallout was not pretty. Mr Leonsis stayed with AOL after the bust, eventually stepping down from the company as its vice chairman in 2006 after helping it recover from the depths of the crash. “Ted Leonsis helped build AOL, not once, but twice,” the company’s then-CEO Jonathan Miller told the Washington Post when Mr Leonsis stepped down.

While Groupon never inflated to the extreme valuations given to AOL and other tech companies of the first bubble, it was still one of the fastest growing companies of all time, and was valued at a peak of over $17 billion in the weeks following its IPO in November, 2012. Today, it is worth just under $3 billion.

So for Mr Leonsis, some of that institutional memory that comes from seeing a company rise, fall, and gradually rebuild itself could come in handy as he tries to steer Groupon out of its funk. Convincing investors he can do that will be tricky but essential; many think that while the daily deal business itself is lucrative, Groupon was unable to capitalize on it under its old management. The WSJ’s Drew FitzGerald quoted one analyst to this effect today:

“We have little confidence in Groupon’s ability to attack 48 countries and 500 markets simultaneously and profitably,” Jordan Rohan, an analyst for investment bank Stifel Nicolaus, wrote. “We remain intrigued by the potential of the daily deals business, but have no faith in the ‘playbook,’ as described to investors.”

The company needs a complete makeover, Mr. Rohan said, and current management team doesn’t seem ready to make such changes.

“To be clear, we believe Groupon has a strong core following in some markets, for some types of merchants and for some consumers,” he said. “But the dream of becoming the operating system for local commerce, is, well, just a dream.”

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8:09 pm February 28, 2013

Former AOLer wrote:

Mr Gara, you got a key fact quite backward when you said, "AOL was eventually bought by Time Warner for $112 billion in 2001". It was the other way around; AOL acquired Time Warner.